Value creation through API ecosystem : Case KONE

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Value creation through API ecosystem

Case: KONE

Vaasa 2021

School of Management Master’s Thesis Managing Growth Companies

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VAASA UNIVERSITY School of Management

Author: Olli Kilpeläinen

Topic of the thesis: Value creation through API ecosystem - Case: KONE Degree: Master of Business Administration

Degree program: Managing Growth Companies Thesis instructor: Anne Söderman

Year of graduation: 2021 Page count: 94 ABSTRACT:

Digitalization and technological disruption have become prominent drivers of change in multiple industries around the world. New business models enable companies both to benefit from the possibilities enabled by digitalization and technological disruption, and to defend their existing core business against market disruptions. In a fast-paced digital world, it is exceedingly important to innovate faster. These developments have led to new business principles where value is created in networks between multiple companies rather than alone by a single actor.

This thesis asks how such value creation happens specifically in the scope of a traditional industry going through change enabled by digitalization. The research focuses on ecosystems enabled by application programming interfaces (APIs) acting as boundary resources between different companies. It explores how value is created in such an ecosystem and how that value can be monetized to generate new revenue streams for the companies in question.

This research is a qualitative study and was done by conducting semi-structured interviews to explore the views towards the case study company’s API ecosystem both from the perspective of the company’s own employees and company external representatives from the ecosystem.

The interviews were analysed with qualitative content analysis to identify thematic categories emerging from the similarities and differences in perspectives raised by the interviewees.

This thesis finds that value creation is a very multifaceted topic. Value creation through API ecosystem is a trade-off encompassing multiple elements where openness and flexibility are key in enabling modular services that can serve different types of customer segments with an offering fitting for their unique needs. Furthermore, five different models of monetization were identified, however, it is recommended that there is no single correct model, but rather the monetization model depends on the maturity of the company itself and the market where it operates.

Based on the study, it becomes clear that companies need to learn and adapt when they approach new business models. The importance of APIs and ecosystems require companies to think beyond their own value creation process and consider a thematic, stepwise approach towards new markets and business opportunities.

KEY WORDS: digitalization, technological disruption, innovation, business model, API, ecosys- tem, digital platform, value creation

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VAASAN YLIOPISTO

Johtamisen akateeminen yksikkö

Tekijä: Olli Kilpeläinen

Tutkielman nimi: Arvonluonti API ekosysteemin kautta - Case: KONE Tutkinto: Kauppatieteiden maisteri

Oppiaine: Kasvuyrityksen johtaminen Työn ohjaaja: Anne Söderman

Valmistumisvuosi: 2021 Sivumäärä: 94 TIIVISTELMÄ:

Digitalisaatiosta ja teknologisesta murroksesta on tullut vahvoja muutoksen ajureita useilla toimialoilla ympäri maailmaa. Uudet liiketoimintamallit mahdollistavat sen, että yritykset voivat hyötyä digitalisaation ja teknologisen murroksen tuomista uusista mahdollisuuksista, sekä myös puolustaa olemassa olevaa ydinliiketoimintaansa. Nopealiikkeisessä digitalisoituvassa maailmassa on erityisen tärkeää pystyä innovoimaan nopeasti. Nämä kehitykset ovat johtaneet uusiin liiketoimintaperiaatteisiin, joissa arvonluonti ei enää tapahdu yhden yrityksen toimesta, vaan arvo luodaan verkostoissa.

Tämä opinnäytetyö kysyy, miten edellä kuvattu arvonluonti tapahtuu erityisesti digitaalisen muutoksen läpikäyvän perinteisen yrityksen näkökulmasta. Tutkimus keskittyy digitaalisiin ekosysteemeihin, joissa resursseja jaetaan ohjelmointirajapintojen (application programming interface, API) kautta eri ekosysteemitoimijoiden välillä. Se tutkii, miten arvonluonti tapahtuu tällaisissa ekosysteemeissä ja miten arvo voidaan muuntaa rahaksi, luoden uusia liikevaihtovirtoja kyseisille yrityksille.

Tutkimus on luonteeltaan laadullinen haastattelututkimus. Se toteutettiin hyödyntäen semi- strukturoituja haastatteluja tutustuen näkemyksiin tapausyrityksen API ekosysteemistä niin yrityksen omien työntekijöiden kuin myös ekosysteemin muiden toimijoiden edustamien henkilöiden näkökulmista. Haastattelut analysoitiin perustuen laadulliseen sisällönanalyysiin ja sen pohjalta löytyneisiin temaattisiin kategorioihin pohjautuen haastateltavien perspektiivien samankaltaisuuksiin ja erilaisuuksiin.

Tämä opinnäytetyö osoittaa, että arvonluonti on hyvin monisäikeinen aihealue. Arvonluonti API ekosysteemin kautta on valinta sisältäen monia elementtejä, joista avoimuus ja joustavuus ovat avainasemassa mahdollistaen modulaariset palvelut, jotka voivat palvella erilaisia asiakassegmenttejä ja heidän ainutlaatuisia tarpeitaan. Lisäksi tunnistetaan viisi eri arvoon pohjautuvaa hinnoittelun mallia. Suositus kuitenkin on, että ei ole olemassa yhtä oikeaa mallia, vaan sopiva malli perustuu kyseessä olevan yrityksen sekä sen kohdemarkkinan digitaaliseen kypsyyteen.

Perustuen tutkimukseen, johtopäätös on, että yritysten täytyy oppia ja mukautua lähestyessään uusia liiketoimintamalleja. APIen sekä ekosysteemien tärkeys vaatii yrityksiä miettimään arvonluontiaan yrityksen omien prosessien ulkopuolelta ja harkitsemaan temaattista, askelittaista lähestymistapaa uusia markkinoita ja liiketoimintamahdollisuuksia kohti.

AVAINSANAT: digitalisaatio, teknologinen murros, innovaatio, liiketoimintamalli, API, ekosys- teemi, digitaalinen alusta, arvonluonti

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Figures

Figure 1. The Value Proposition Canvas. 17

Figure 2. The B2B elements of the Value Pyramid. 19

Figure 3. A modular service with two service elements and one interface. 21

Figure 4. Value creation framework. 22

Figure 5. Three types of ecosystems. 24

Figure 6. The principle setting of platform ecosystem. 28

Figure 7. Players in a platform business. 31

Figure 8. KONE Digital Platform and APIs. 39

Figure 9. KEKO smart building ecosystem. 40

Figure 10. Illustration of a Smart Building Ecosystem, an ecosystem of ecosystems. 41

Figure 11. Six analytical themes of the analysis. 55

Figure 12. Highlighted parts of the Value Pyramid. 59

Figure 13. Offering strategy proposal based on market maturity. 64 Figure 14. Different monetization models discussed. 66 Figure 15. Potential evolution of pricing strategy. 69 Figure 16. API ecosystem value creation process framework. 83

Tables

Table 1. Benefits and sacrifices in perceived customer value. 14

Table 2. Coded interviewee list. 46 Table 3. The most important components of value. 60

Table 4. Service modularity considerations. 65

Table 5. Monetization considerations. 70

Table 6. Main challenges seen today. 72

Table 7. Future overviews summary. 74

Table 8. Summary of the considerations related to API economy. 77

Table 9. Synthesis of the analytical categories. 78

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Acronyms

API Application Programming Interface

B2B Business to business

B2C Business to consumer

B2D Business to developer

EUR Euro

GDPR General data protection regulation

IoT Internet of things

SDL Service-dominant-logic

SME Small and medium-sized enterprise

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1 Introduction

This section introduces the research. The background of the research is explained, and the research questions are presented. The research scope is defined and finally the structure of the thesis is summarized.

1.1 Background, motivation, and research context

The megatrend of digitalization is changing industries faster than ever before.

Companies are able to utilize technology to change how products and services are created, marketed, sold, and delivered to the customers. This allows companies to develop new business models and disrupt existing industries, where the established market leaders are often focusing on optimizing their existing business and processes.

Market dynamics are changing faster as barriers of entry are removed by technology and substitutions for existing products and services are created with the help of technology.

In this rapidly changing digitalizing world, it is paramount that companies innovate faster in order to stay competitive. The developments described in the preceding paragraph have led to new methods of value creation, where customer value is no longer created by one actor alone, but rather by multiple companies co-creating the value consisting of multiple products and services. These business networks and business ecosystems are a way for companies to collaborate and compete in new ways. In order to build these value chains consisting of the offering from multiple companies, resource sharing and interfacing are crucial. Application programming interfaces (APIs) have become a prominent part of modern business models enabling both the technical as well as the business interface between these actors in the ecosystems.

This thesis explores this phenomenon of value creation through API-enabled ecosystems.

The API ecosystem and its impact on digitalization and new business models is

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considered. In order to discuss and understand digitalisation in a holistic manner, API ecosystems and the role they play cannot be overlooked.

1.2 Research Questions

The overarching problem addressed in this thesis is how to create value through API ecosystem and how to monetize this value. To address these problem areas, two research questions will be explored:

The first problem area is the way in which the different stakeholders conceptualize value creation through the case API ecosystem, elucidating similarities or differences in approaches.

Thus, the first research question is:

R01: How do different stakeholders see value creation through API ecosystem?

The second problem area is the question of how the value is turned into monetary business benefits. Value can be created by offering ready solutions as they are or through enabling customization and modification of the solutions offered through different methods. Monetization is therefore a choice embedded in the offering strategy and something to be considered in depth. The differences and similarities in the opinions of the different stakeholders are considered.

Thus, the second research question is:

R02: How do different stakeholders see the process of turning value from the API ecosystem into money?

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The goal of these research questions is to formulate recommendations on how to create value through API ecosystem and on how to monetize value in the context of the case study company and industry.

1.3 Research Scope

The case analysed in this thesis is KONE Oyj (later: KONE) and their approach to API ecosystem and digitalization. The scope of the thesis is therefore KONE and their digital transformation and business. However, the research findings are generalized as far as possible to allow findings to be used in other industries and concerning other companies as well.

KONE is an internationally established industry player founded in Finland in 1910. The company is going through a heavy digitalization transformation. Throughout its over 110- year long history, KONE has always functioned in the same market, providing elevators, escalators, and automatic building doors, along with solutions for maintenance and modernization of these equipment. (KONE, 2021) KONE’s core function is described as

“add[ing] value to buildings throughout their life cycle” (KONE, 2021). KONE had a revenue of EUR 9,9 billion in 2020 and over 60 000 employees in over 60 countries, making it one of the largest and most global companies in Finland (KONE, 2021). The company defines itself as “a global leader in the elevator and escalator industry, and our job is to make the world’s cities better and more sustainable places to live” (KONE, 2021).

As can be seen from the statement, the company wants to define a clear purpose which is beyond manufacturing equipment. This is also reflected in the company’s official mission statement: “Our mission is to improve the flow of urban life” (KONE, 2021).

KONE’s strategy is based on megatrends, out of which three are seen as important to KONE, Urbanization, Sustainability and Technology. Digitalization is seen clearly in the highlighted opportunities for growth section of that strategy, where the company identifies connectivity and adaptability as well as products and services to create value to their customers in new ways (KONE, 2021). They also make a statement about

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“becoming the preferred partner for smart and sustainable city development” (KONE, 2021).

In 2019 KONE published their new product portfolio called KONE DX Class elevators, bringing connectivity and digitalization to every elevator product (KONE DX, 2021). This was a big step towards the strategic goals described earlier and shows the clear focus in digitalization. The scope of this research is around this change going on in the corporation. While the company is clearly not a start-up, the orientation to change and breaking down old practices and assumptions in a traditional established company like KONE makes it an interesting target for research.

1.4 Structure of the Thesis

The thesis will proceed as follows. Section two identifies research around the topic of value and value creation, starting from the definition of value and different tools available for value creation. Section three explores the core concepts needed to define what an API ecosystem is. This is done by focusing on research into topics of ecosystems, digital platforms, APIs and monetization of digital services. The definition of KONE API ecosystem is introduced at the end of the section three. Chapter four introduces the method used in this study from research approach to data collection and analysis.

Chapter five collects and discusses the results of the analysis, splitting them into themes that can be used as a link to the theories considered as well as recommendations to the company. Finally, section six is bringing together the conclusions and recommendations for both the company and research alike in a concise manner.

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2 Exploring the Concept of Value

This chapter explores the concept of value. It begins from the definition of value and how it has been approached in literature, proceeding to discuss how value can be created in a network of businesses instead of by one party alone. Then different components of value are considered by introducing four separate tools for structuring value. A framework is then synthesized based on these tools and a process of value creation proposed.

2.1 Defining Value

Value can mean either what a customer perceives and receives, or it can stand for what the customer can deliver (Woodall, 2003, p.3). The latter is related to customer lifetime value and for the purpose of this study we concentrate on the customer perceived value.

Kotler and Keller define customer perceived value as "the difference between customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives" (Kotler & Keller, 2012, p.5). In principle value is therefore always dependent on the individual’s evaluation, perception and eventually the costs they see associated to it. This makes the study of perceived value a difficult concept and an interdisciplinary area involving psychology, sociology, economic and business concepts (Boksberger &

Melsen, 2011; Kotler & Keller, 2012). In the scope of this study there is not a need to delve much deeper into the other disciplines but concentrate on business side and what these value perceptions mean for strategic management. Therefore, the definition offered by Kotler and Keller (2012) can be used as a basis when considering the structure of value and value creation. Value is then created and delivered to customers as products and services that consist of a combination of functional and emotional benefits or reduction of various types of costs perceived by the customer (Kotler & Keller, 2012).

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2.2 Value Creation in Business Networks

Megatrends like digitalization are changing our world, the different markets and competition more rapidly than ever. These trends make it faster and easier to create new products and services that disrupt industries and change the competitive conditions very rapidly. This requires the companies providing services and products to continuously update the value they create and is a challenge faced by multiple companies in different industries. (Jarillo, 1988; Prahalad & Ramaswamy, 2004, Vargo et al., 2008).

Companies need to adjust their strategy and utilize resources beyond what their own company alone can have in order to remain competitive (Dyer & Singh, 1998; Jacobides, 2019). Value is therefore more and more often no longer created by one party alone, but it is co-created by multiple service providers and even customers together (Lacoste, 2014;

Pekkarinen & Ulkuniemi, 2008; Prahalad & Ramaswamy, 2004; Vargo et al., 2008). This kind of collaborative value creation and innovation happens between different companies that form a business network (Ford et al., 2011; Håkansson & Ford, 2002;

Jarillo, 1998; Lacoste, 2014). Such a business network is any network of companies that work together to accomplish certain shared objectives (Ford et al., 2011). It is widely recognized and studied that business networking has become a way to keep up with changes in environments, markets, product, and service offering and relationship management (Allee, 2009; Ford et al., 2011; Håkansson & Ford, 2002; Jarillo, 1998;

Kohtamäki & Rajala, 2016; Lacoste, 2014; Moore 1996; Söderman 2014). A single company is then becoming more like a node in a network, where its strategic focus is on how to connect with other organizations in the network (Håkansson & Ford, 2002;

Kohtamäki & Rajala, 2016; Ritter et al., 2014) in order to create value that matches the needs of its customers. Organisations also co-evolve through their interactions in this value creating network (Moore, 1996). Therefore, it is crucial to also consider value creation as a networking activity and how these networks affect the value creation and perception process.

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In business value networks a group of mutually complementary companies are said to offer “a complete value proposition” (Clarysse et al., 2014, p.1164), indicating how different resources, competences and potentially different solutions need to be combined in order to fulfil the customer need (Håkansson & Ford, 2002; Möller 2006;

Prahalad & Ramaswamy, 2004). Networks can form over time as a result of common activities, or they can be purposeful networks like organizations creating value interactions towards a certain activity or planned outcome (Allee, 2009). In such strategic networks different organizations turn both tangible and intangible assets into offerings to fulfil different functions, which can complement each other (Allee, 2009; Jarillo, 1998;

Möller, 2006). This kind of value-creating network can be defined as “any purposeful group of people or organizations creating social and economic good through complex dynamic exchanges of tangible and intangible value” (Allee, 2009, p.429). External facing value networks include the organization, its suppliers, strategic partners, investors, and customers (Allee, 2009). These different actors can produce complementary offering or service, creating value by generating a new benefit or reducing a sacrifice as a module in a bigger offering created by the network. On the other hand, service-dominant-logic (SDL) states that “Actors cannot deliver value but can participate in the creation and offering of value propositions” (Vargo & Lusch, 2016, p.8).

In this manner the value network creates a better chance of fulfilling the changing customer needs and also further adaptability and flexibility to address these needs (Kohtamäki & Rajala, 2016); Prahalad & Ramaswamy, 2004). Value networks refer therefore bring together multiple companies, where the value proposition is offered by a group of actors which are mutually complementary (Clarysse et al., 2014). No one actor is therefore delivering value as stated by Vargo & Lusch (2016) but contribute to the process where the value creation happens together by the different parties including customers, suppliers, partners, and other actors in the network (Kohtamäki & Rajala, 2016; Vargo & Lusch, 2016). Even though this is stated differently in other studies (Allee, 2009; Clarysse et al., 2014), the intent is the same in the way that the value grows by different parties interacting and complementing each other. In chapter 3, digital

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platforms and API ecosystem are introduced as a specific implementation of a business network and this value creation process is discussed in more detail.

2.3 Components of Value

Value perception is not constant. It varies throughout the process and customer journey.

It can be split to four stages from before the decision to buy, value perceived at the time of purchase to value perceived after the purchase and finally after using the product or service (Woodall 2003, p.12). The value perceived through these different stages is comprised of several elements. Everyone sees value from their own perspective, or in other words “Value is always uniquely and phenomenologically determined by the beneficiary” (Vargo & Lusch, 2016, p.7). Defining value is an intricate process that relies on many moving parts, thus being reflective of the multidisciplinary nature of the value concept itself. A variety of tools exist for defining what value means through splitting it to different components. Below four different approaches and tools will be introduced.

2.3.1 Benefits and Sacrifices Trade-off

Woodall (2003) defines customer perceived value as a trade-off between benefit and sacrifice. Value can therefore appear as presence of benefit or reduction of sacrifice (Kotler & Keller, 2012; Woodall, 2003). Benefits can be simple features of a product, but especially in a service business and digitalization a benefit can also for example come from usage of digital services supporting company strategy or enhancing the brand of the company as a modern one (Moilanen et al., 2019). Sacrifices can also be split to monetary and non-monetary sacrifices. Often it is easier to evaluate the direct monetary sacrifices but forget for example the non-monetary sacrifices related to lost time when using a poorly designed digital service (Moilanen et al., 2019). Benefits can be considered to consist of attributes and outcomes. For example, one can consider quality from multiple viewpoints through attributes such as product quality, technical quality,

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functional quality or performance quality just to name a few (Woodall, 2003). These can be directly or indirectly related to benefit outcomes such as financial benefits or convenience or operational benefits (Woodall, 2003). A product that has good perceived quality can lead to financial benefits for the user utilizing it as part of something bigger.

Performance quality can lead to operational benefits and greater convenience when there is no need to “pay” for the loss of performance in terms of operational delay or waiting times. Such payments could be considered non-monetary, but they can also have directly measurable cost impact when for example operation relates to yield of a rendered service. (Woodall, 2003) Common benefits and sacrifices in perceived customer value have been explored in depth by Woodall (2003) as shown in Table 1 below, showing the complexity of the topic at hand like the different angles discussed here. Woodall’s (2003) table can be considered a tool when constructing the value of a product or service, to make sure different components as well as cause-and-effect paths are taken into consideration as illustrated by the examples earlier.

Table 1. Benefits and sacrifices in perceived customer value. (Woodall, 2003, p.14)

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2.3.2 Value Proposition Canvas

Another very commonly used tool for defining value is the ‘Value Proposition Canvas’

introduced by Osterwalder and his team (2014). The Value Proposition Canvas consists of a customer profile and value map. The Customer (Segment) Profile breaks the customer down into its jobs, pains, and gains. The Value (Proposition) Map breaks the value proposition into products and services, pain relievers, and gain creators.

(Osterwalder et al., 2014) The canvas is shown in figure 1.

Figure 1. The Value Proposition Canvas. (adapted from Osterwalder et al., 2014, p.8)

This canvas is usually used in defining a product or service to address a customer job to be fulfilled. The design of such a product or service is based on the gains and pains perceived by the customer group and the correspondent gain creators and pain relievers.

(Osterwalder et al., 2014) These can then fulfil different value definitions and consider both benefits and sacrifices as in Woodall’s (2003) model.

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2.3.3 Value Pyramid

Almquist and others (2016, 2018) studied value elements both in the context of consumer perceived value in business-to-consumer (B2C) market and later in the context of business counterpart perceived value in business-to-business (B2B) market.

Studying the B2C context, Almquist and others (2016) proposed that the customers weigh the product or services value against the asking price. This is directly linked to Woodall’s (2003) framework and the original definition of value by Kotler and Keller (2012). In their study Almquist and his colleagues (2016) mapped 30 different elements of value split to four different categories: functional, emotional, life changing, and social impact. Study based on this pyramid view of value elements showed that the companies that performed well on multiple elements also had more loyal customers than the other companies in the study (Almquist et al., 2016, p.50). Loyalty of customers is another interesting benefit that can be both measured by utilizing multiple attributes and outcomes. This thesis is focused on a case study of a B2B company. Even though buyers in organization are also human and have similar decision-making patterns as in B2C business, there are differences in value perception to be taken into account in this context.

Almquist and his colleagues (2018) defined another set of 40 value elements for B2B context and mapped them into five categories: table stakes, functional, ease of doing business, individual, and inspirational (Almquist et al., 2018). These 40 distinct B2B value elements are presented for customers as a pyramid with five levels. The most objective kinds of value elements are found at the base, and the higher a level is, the more subjective and personal the types of value it contains. (Almquist et al., 2018). In this context, table stakes value elements are the starting point, comprising of meeting the customer expectations, acceptable price, compliance with regulations and ethical standards. If the table stakes are not met, the rest of the value do not usually matter, and a deal is not made. The level of functional value means economic and performance elements from direct revenue and cost reduction to product quality, scalability and

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innovation. If the customer sees the value corresponding to their needs this far, then they can extend their evaluation to third level called ease of doing business value. These elements are numerous and how they are perceived is very industry specific. They can be split to five categories operational, strategic, productivity, access and relationship, each comprising of multiple elements within. In the fourth level of the value pyramid is individual value. At the end of the day, the person purchasing a product, or a service is still an individual and they have more subjective value expectations as well from personal preferences to career related. At the top of the pyramid are inspirational value elements related to the subjective purpose perceived by the individual making the decision. If the value can be tied to their vision of the future or bring as aspect of social responsibility, it can have a high impact on the perceived benefits. The different levels are illustrated in figure 2. (Almquist et al., 2018)

Figure 2. The B2B elements of the Value Pyramid. (adapted from Almquist et al., 2018, p.4)

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Value in B2B context has not been researched in as much detail as B2C, but there is literature available indicating how the perceived value also changes differently in B2B context (Almquist et al., 2018; Flint & Woodruff, 2002). The changing customer value means that the value creation process should anticipate change over time and not assume constant value creation (Flint & Woodruff, 2002). This leads to the finding that companies should consider how to constantly evolve their value proposition to stay competitive. A company looking to increase their market share as a priority today might value scalability above all in the value pyramid, but once their own situation changes, they might see for example productivity as a much more important area of focus.

2.3.4 Modularity as a Value

As discussed earlier in this chapter, perceived value comprises of multitude of elements and varies based on the context and the customer (Almquist et al., 2016, 2018; Woodall, 2013). It was also discussed how value creation takes place in business networks and is co-created rather than created alone by one company (Dyer & Singh, 1998; Jarillo 1988;

Kohtamäki & Rajala, 2016; Prahalad & Ramaswamy, 2004, Vargo et al., 2008) How then can a company be flexible enough to co-create further value for different needs and challenges with other parties? Service modularity is a key component in making this possible and utilizing a service platform approach to serve different customer needs (Pekkarinen & Ulkuniemi, 2008). How to fulfil the different benefits and sacrifices (Woodal, 2013), how to build pyramids of value (Almquist et al., 2018) and consider fulfilling the customer jobs (Osterwalder et al., 2014) are driven by modular services.

Modular services, whether digital or not, consist of multiple service elements and interfaces between them. This linkage of service modules by an interface is illustrated in figure 3. A service that is designed to work together with other services to create further value proposition should take the interfacing of the services into account in the design process (Pekkarinen & Ulkuniemi, 2008). This can be considered equally relevant for services with physical attributes as well as fully non-physical services such as digital services.

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Figure 3. A modular service with two service elements and one interface. (Pekkarinen &

Ulkuniemi, 2008, p.85)

By utilizing modularity an offering can be both flexible, and also offer possibility to be tailored to fit specific customer needs and fulfil more value propositions (Rahikka et al., 2011). It is shown in Rahikka’s and others’ (2011) study that the aspect of service modularity affects the earlier discussed value elements, both benefits and sacrifices.

This model has many similarities in the benefits side to Woodalls (2003) and Almquists (2016) models and links can be made to Osterwalder’s value proposition canvas as well.

However, while service modularity approach can be viewed as an extension to the other value definition models described here, it does not take sacrifices made into account as well as Almquist (2018) and Osterwalder (2014). Costs are considered, but not other sacrifices needed for the chosen value creation approach. Even though this gap can be found in the modularity concept, it is of high importance to a digital service business and can be seen as a clear extension to the other models introduced. In this study, we can utilize the findings from the other studies to complement the service modularity theory and therefore offer a richer model and framework for value perception.

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2.4 Synthesizing a Value Creation Framework

By combining the four value definition tools introduces in the preceding sections, an iterative and heuristic framework and process can be defined for value creation. The process starts with the simultaneous consideration of the benefits to be created for the target customer segment and their trade-offs compared to sacrifices the customer is expected to make on a high level based on Woodall’s (2003) approach. These benefits and sacrifices can then be alleviated by following Osterwalder’s (2014) Value Proposition Canvas approach by defining gain creators and pain relievers in more depth followed by defining the minimum viable product or service to address them. As a third step, one should consider how the value proposition fits on Almquist’s (2018) value pyramid concept. Here, it should be considered whether there are lower layers being ignored, which would render the value proposition incomplete, or whether there are possible horizontal or higher value elements that should be added to complete value proposition to make it more attractive. Finally, as this approach can reveal a lot of gaps that one company or one service alone cannot fulfil (Håkansson & Ford, 2002; Prahalad &

Ramaswamy, 2004), modularity of the service (Pekkarinen & Ulkuniemi, 2008) should be considered to allow easier extension to cover a wider range of value elements and co- creation of further solutions and services to address those values. Then the process can once again start from the beginning and consider especially the new sacrifices that were introduced and whether it is still viable to consider wider value proposition concept or perhaps rely on other services fulfilling the gaps. This proposed value proposition creation framework is illustrated in figure 4.

Figure 4. Value creation framework.

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3 API Ecosystem

This section defines the second core concept of the study, an API ecosystem. To reach this definition, business ecosystems are introduced first, followed by digital platforms and the specific processes of value creation offered by them. Application programming interfaces are introduced along with basics into monetization of digital services to complete the definition of an API ecosystem and how it has been built for the case study company. The final chapter then introduces how this kind of API ecosystem has been defined in the case study company.

3.1 Ecosystem

Ecosystem concept comes from biology and was originally introduced by Moore in 1993.

Moore (1993) compared business organizations and individuals to biological organism, which evolve over time. Ecosystems have sparked a lot of research and interest lately with an attempt to create classification and understanding of the various interactions (Adner, 2017; Han, 2017, Jacobides et al., 2018; Scholten & Scholten, 2012; Valkokari et al., 2015). One definition following Moore’s original idea is “an economic community supported by a foundation of interacting organizations and individuals – the organisms of the business world” (Valkokari et al., 2015). Another good definition is “ecosystem—

the alignment structure of the multilateral set of partners that need to interact in order for a focal value proposition to materialize” (Adner, 2017, p.40). Ecosystems are continuously and dynamically evolving through interactions between the different parties and actors within. Business ecosystem is therefore a special kind of business network (Håkansson & Ford, 2002; Jarillo, 1998), which were introduced earlier in section 2.2. Both definitions of an ecosystem highlight the foundation and alignment needed in an ecosystem to enable further interaction and hence value creation as discussed in the context of business networks (Kohtamäki & Rajala, 2016; Ritter et al., 2014) generally in previous chapter as well.

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However, due to the high interest in ecosystems in business research, there have been multiple different types of ecosystems introduced. Some studies draw lines between business ecosystems, innovation ecosystems, entrepreneurial ecosystems and knowledge ecosystems (Adner, 2017; Clarisse et al., 2014; Scaringela et al., 2018).

Valkokari’s (2015) popular split is between Business Ecosystem, Innovation Ecosystem and Knowledge Ecosystem as illustrated in figure 5.

Figure 5. Three types of ecosystems. (Valkokari, 2015, p.20)

This thesis focuses on the intersection of the business- and innovation ecosystems. As evident from figure 5, ecosystems cannot be strictly separated in practice. However, for the analytical purpose of this thesis, the choice was made to concentrate on the innovation and business aspects, while fully acknowledging the importance of knowledge ecosystems (Valkokari, 2015) and entrepreneurial ecosystems (Adner, 2017;

Clarisse et al., 2014; Scaringela et al., 2018) as well.

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While ecosystems have sparked a lot of interest in research and many businesses tend to talk about their ecosystems, there are also those who argue that the term is over- used, and the meaning is getting blurry at best (Oh et al., 2016; Ritala et al., 2017;

Tsujimoto et al., 2018). Innovation systems as an example have been studied for even longer and their tension towards each other seen as a driver for further innovation. In this sense the same topic is now researched under the innovation ecosystem umbrella and may be just a newer name for the same topic. (Oh et al., 2016) Even though Moore defined ecosystem based on biology, the definition is very different in different branches of research (Tsujimoto et al., 2018). Strategic networks, supply chain management and innovation system theories all seem to cover very similar approaches (Oh et al., 2017;

Tsujimoto et al., 2018). Perhaps the differentiating characteristic of ecosystem research is the angle of co-evolution of the parties within the same ecosystem and how their interactions, evolution and actions affect the balance of that ecosystem differently than in other similar concepts (Ritala et al., 2017; Valkokari, 2015). Each actor in an ecosystem has their own goals and own activities bringing both positive and negative aspects to the ecosystem including competition (Tsujimoto et al., 2018). These aspects of interaction and evolution between different organizations could grant the right to use the word ecosystem and, in this thesis, we accept the slightly ambiguous definition and accept the definition of ecosystem as seen by Moore (1993), Scholten & Scholten (2012), Jacobides (2018), Adner (2017), Valkokari (2015) and others.

Value in an ecosystem is generated together for end-customers by integrating interdependent subsystems (Han et al., 2017). These different subsystems are pieces of a larger value creation process in both service and product businesses. Modularity in service and product business, as discussed earlier, is seen as a crucial enabler for ecosystem emergence, allowing distinct organizations to cooperate without much hierarchy (Jacobides et al., 2018; Rahikka et al., 2011). With the changing market and demands, corporations face more risks and costs which they can aim to counter by implementing open modular platform with an ecosystem around it providing further innovations (Scholten & Scholten, 2012). Therefore, instead of focusing on building

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individual products and services to serve the value proposition demanded by the market, companies must focus on competition of digitally enabled ecosystems that span across industry boundaries and offer customizable product and service bundles (Jacobides et al., 2018; Rahikka et al., 2011).

Based on the definitions discussed above, the concept of an ecosystem is therefore fitting very well with the value creation framework introduced in the section 2.4 of this study. The framework offers a value creation process to widen the scope of benefits being offered to customers and enabling sacrifices being either lowered by specialized companies or at least spread between different interchangeable service elements. It also enables easier access for companies to multiple levels of a value pyramid by allowing different services being combined modularly to complement each other’s value proposition. Each actor is bringing their own piece to the value creation process and co- evolving together with the rest of the ecosystem actors as Moore (1993) defined.

3.2 Digital Platform

Platform is a term used to describe a focal point in an ecosystem. It is the centre or hub around which a specific ecosystem can be created. Platform can refer to both business model and infrastructure, digital or physical (Choudary 2015, Hein et al., 2019; Parker et al., 2016). In this chapter the concept is studied further, and the unique value creation methodology offered by digital platforms is linked to the earlier theories introduced in this thesis.

3.2.1 The Concept of Platform

Platforms have existed in one form or another for a long time. Shopping malls are platforms for consumers and merchants; and newspapers for subscribers and advertisers (Van Alstyne et al., 2016, p.2). A newer form of platform business has emerged from

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digital platforms (Choudary, 2015; Parker et al., 2016; Van Alstyne et al., 2016). Digital platforms have become very familiar for consumers in many industries through companies such as Spotify, Airbnb, Uber, Apple, Google, Facebook and many others.

They are changing how value is created in an industry and often changing the logic of the industry altogether or even creating new ones completely (Parker at al. 2016).

Platforms can be considered as building blocks forming a foundation upon which other companies can build complementary offering in a modular fashion (Parker et al., 2016, Choudary, 2015). According to Van Alstyne and others (2016) as well as Parker and others (2016), a platform ecosystem then includes the platform owner and their own core offering including a governance model for the platform. The platform owner in this type of an interaction also handles the mediating and interfacing between different service modules, or they can have direct linkages. Scholten and Scholten (2012) define that a service ecosystem is formed from complementary products and the whole platform ecosystem enables the complete customizable solution which is offered to the consumers of the platform ecosystem. This is illustrated below in figure 6. With a platform approach like this, each customer can be offered a unique collection of services fulfilling their needs with the help of the platform. This is strongly linked to the value creation principles in business networks (Håkansson & Ford, 2002; Jarillo, 1998) as well as ecosystem value creation (Han et al., 2017; Jacobides et al., 2018; Rahikka et al., 2011).

In the figure 6, a platform consumer C1 is offered a total ecosystem solution consisting of four different services illustrated by a blue line, while C2 is served by the green and C3 by the yellow highlighted service offering, respectively (Scholten and Scholten (2012).

Digital platform is therefore bringing together the concepts of network value creation (Håkansson & Ford, 2002; Jarillo, 1998), service modularity (Pekkarinen & Ulkuniemi, 2008) and ecosystems (Moore 1996; Adner, 2017; Han, 2017, Jacobides et al., 2018).

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Figure 6. The principle setting of platform ecosystem. (adapted from Scholten & Scholten, 2012, p. 167)

Consumers of value can acquire products or services and get their needs fulfilled by the different service providers in the ecosystem through the platform (Han et al., 2017;

Scholten & Scholten, 2012). The platform is hence a mediator of value enabling the combination of modular value elements and easy distribution to the consumers. The platform business model is therefore to be a provider of tools and channel to fulfil the value creation framework which was defined earlier in chapter 2.4.

3.2.2 Platform Value Creation

In platform business, value is created with customers, partners and end-users together often completely outside of the platform company itself (Parker et al., 2016; Van Alstyne et al., 2017). This links very strongly to ecosystems as summarized by Hein and others (2019): "Digital platforms utilize an ecosystem of autonomous agents to co-create value"

(Hein et al., 2019, p. 87). Airbnb and Uber are great examples of how value creation logic in an industry can be changed by platform businesses. Already by 2014, Airbnb listed half a million properties and had served over 10 million guests without owning or operating any property itself (Parker et al., 2016, p. 2-3). It is a great and classic example of a B2C

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platform company completely changing the value creation logic in hospitality industry.

Similarly, Uber is changing taxi industry’s value creation and is called the world’s largest taxi company without owning any vehicles (Parker, 2016). These are but two examples that show how in platform businesses, value is created differently than before. What is common for these two examples is de-linking assets from value (Parker et al., 2016). A platform in this case enables an asset to be used by someone else than its owner and sometimes for a different use than what it was originally purchased for. This is another way how platforms disrupt existing markets, by re-defining the value creation process itself (Parker et a., 2016). This enables a change in consumer behaviour by enabling new ways to get the service they need. It is a disruption of business model even when the services themselves would have been accessible differently before as well.

Working in collaboration in a business network or ecosystem grants the organization access to new knowledge, enables shared risk taking and resources and joining complementary skills and capacities, which allow the companies to focus on their own core competencies (Romero & Molina, 2011). Earlier it was defined how value creation in networks is a joint effort (Håkansson & Ford, 2002; Jarillo, 1998). Prahalad and Ramaswamy (2004) popularized the term co-creation which is the activity of company and the customer creating value jointly, enabling the customer to co-construct the service experience in their own context. Related, Vargo and others (2008) introduced their service-dominant logic thinking defining how any goods are simply service delivery vehicles and knowledge and skills are the key to competitive advantage. Furthermore, they argued that there is no value until the offering is used and such offerings always need to be combined with other firms offering and market before it can deliver the value (Vargo et al., 2008). Individual firm’s value creation, value proposition and services are only intermediary to the whole value co-creation- process, which combines the value from different sources and eventually forms the final benefits and sacrifices (Vargo et al., 2008). Value must be jointly created by both corporations and consumers as co- producers. Here is a clear link to earlier concepts of platform ecosystem value creation by Scholten & Scholten (2012) and service modularity by Rahikka and others (2011) and

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Pekkarinen and others (2008). In a digital ecosystem the co-creation process can therefore include all the parties of the ecosystem, widening Prahalad’s and others (2004) definition to include also complementary service providers, strategic business partners and the customers in collaboration with the platform owner or hub company. A digital platform ecosystem must then be able to attract and connect these different value providers. Value creation of the different participants in an ecosystem, both users and producers, form the core of the platform and its core interactions (Korhonen et al., 2017).

Making sure the core interaction is encouraged and fostering is a key to co-creation activities in such a digital platform ecosystem.

Another characteristic of a digital platform business is the network effect, where users create value for other users (Van Alstyne et al., 2017) and therefore attract more users creating a beneficial cycle. There is direct network effect, where the value of the service is directly increasing when the number of users increases, or in other words the network grows. Indirect network effect is when the value depends on two or more groups such as producers, consumers, buyers and sellers. (Korhonen et al., 2017; Parker et al., 2016;

Van Alstyne et al., 2017). When the co-creation of value happens between complementors or service providers and customer as well as the platform owner, this multi-sided network effect means that customers attract new service providers and the now extended ecosystem attracts more users. Same-sided network effect in addition means that customers attract more customers and service providers attract more service providers. (Rochet & Tirole, 2003) The growing value creating ecosystem is acting as a virtuous loop increasing the value creation possibilities and furthermore the flexibility, modularity, and attractiveness of the whole ecosystem (Rochet & Tirole, 2003). Network effect increases the value of the whole ecosystem as there is more exchange taking place with the increase in provided services and users. As there is more value created, there is also further demand for value consumption (Choudary et al., 2015). Network effect also creates stickiness of the service and ties users and producers both to the platform, making it less likely they leave the platform for another (Choudary et al., 2015). With this

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effect a platform owner can reach market dominance and become hard to replace and compete with (Parker et al., 2016, Choudary et al., 2015).

Platforms bring together the value producers and consumers and provides the infrastructure for the business (Van Alstyne et al., 2016). Figure 7 depicts a general view of the players in a platform business. A good example can be given using Android mobile operating system as an example. Consumers are interested in applications running on a mobile device operated by Android operating system. In this example Google is the platform owner, owning the intellectual property rights of Android and deciding who can participate in this platform business and how. Sometimes the platform owner is also called the platform sponsor (Van Alstyne et al., 2017). Platform providers are the different mobile devices manufactured by many companies such as Samsung, Huawei, HMD Global and so forth. Producers are all companies and individual developers who are creating applications for the Android ecosystem and publishing them in the application store marketplace. The platform owner and provider make it possible for the producers to sell their products to the consumers, just like a shopping mall brings consumers in reach of multiple merchants. (Van Alstyne et al., 2017)

Figure 7. Players in a platform business. (adapted from Van Alstyne et al., 2017: 5)

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As the platform owner can decide how the business is run on their platform and who can participate, they need to make crucial decisions about the openness of the platform.

How much of the platform resources do they open and how they limit the different players in their platform is a question for the platform owner to decide. Too much openness can lead to value deteriorating effects such as poor-quality contributions, while too closed approach can reduce the number of producers and therefore consumers as well (Van Alstyne et al., 2017).

Value creation in a digital platform depends on the purpose and type of the platform.

Many industrial B2B businesses build digital platforms for the purpose of improving their internal operations while others utilize them for the ecosystem and network effect to create further value for their customers as described earlier. One way to categorize platforms is to group them into transaction, innovation and hybrid platforms (Teece, 2017). Transaction platform is focusing on the exchange and transactions between different parties, utilizing the power of the network effect to attract further transactions as the platform matures. Amazon, Ebay and Alibaba are examples of a transaction platform. Innovation platforms primarily connect different companies together and enable them complementing each other’s products and services to create further value.

(Teece, 2017) Android and iOS ecosystems are good examples of innovation platforms enabling complementary value creation. Hybrid platforms combine the characteristics of the first two platform types and enable both types of value creation. (Teece, 2017).

From the examples earlier it is clearly seen that the division between these platform types is often difficult at best and hybrid approach can be considered as the most scaling option. Some platforms are also named according to their purpose, such as social (digital) platforms and search (digital) platforms, however these can be viewed as a subset of the mentioned platform types (Teece, 2017). Eventually all digital platforms are enablers for a specific kind of ecosystem and set the rules and limits for the different actors participating in it.

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3.3 Application Programming Interfaces (APIs)

API is the acronym for Application Programming Interface, and it is a set of tools, definitions, and protocols for integrating application software and services (Basole, 2016;

Redhat, 2020). APIs are control points for digital products and services to communicate with other products and services without having to constantly build new connectivity infrastructure (Basole, 2016; Redhat, 2020). Digitalization, platform economy and APIs are changing many traditional business models (Benzell et al., 2017; Moilanen et al., 2019). API is in its simplest definition the digital interface between modular services as introduced in section 2.3.4 and figure 3. There are nearly 15000 distinct APIs available in the open internet and 7000 so-called ‘mashups’, which integrate two or more of such APIs together, showing how popular they have become (Basole et al., 2016).

There has been a lot of research into platform business, ecosystems, and digitalization (Benzell et al., 2017; Choudary et al., 2015; Libert et al., 2016; Parker et al., 2016; Van Alstyne et al., 2016) and while APIs are noted as important enablers in this new business field, their direct impact to value creation has been often overlooked. APIs are however not just part of platform economy, but they can open new business models on their own as well (Benzell et al., 2017; Iyer & Subramaniam, 2015; Moilanen et al., 2019) and create the foundation for digital ecosystems (Benzell et al., 2017). When a company wants to utilize external developers for further value creation, they build APIs (Parker et al., 2016).

Another way to look at APIs is to consider them doors, through which a company can extend to new markets which were earlier out of reach (Iyer & Subramaniam, 2015).

Therefore, although API is a technical concept and requires technology, they should be considered business enablers. APIs are not just the concern for the technical people in an organization, but they concern multiple groups from executive to sales and to customer facing roles. This consideration of APIs as a business concept and their role as both a foundation for digital ecosystems as well as enabler for new business models and economic benefits can be called API economy (Heshmatisafa & Seppänen, 2020;

Moilanen et al., 2019).

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Earlier value creation was discussed in depth and a value creation framework was defined in chapter 2.4. APIs can play a big role in the value creation process and it can be a crucial part of customer’s own value creation process. Earlier it was discussed how the value creating activities between the parties of an ecosystem form the core of the platform and core interactions (Korhonen et al., 2017). Now with further understanding of the value created by APIs it is clear how crucial the value they create is to these interactions. Well-designed APIs can boost a platform ecosystem in its co-creation activity and enhance the network effect further (Moilanen et al., 2019). APIs should therefore be seen as more than technical enablers and more as strategically significant business options like other value generating elements in a business (Iyer & Subramaniam, 2015; Benzell et al., 2017; Moilanen et al., 2019). This finding is one of the fundamental bases when a company considers value creation and strategy around an API-enabled ecosystem.

APIs enable exchange of value between actors and link them together, matching the concepts of the service-dominant logic (Vargo & Lusch, 2016) and modular service business (Pekkarinen & Ulkuniemi, 2008; Scholten & Scholten, 2012) introduced earlier.

Their concepts are based on the possibility to combine different tasks and resources to co-create a full offering. API from a business perspective is a resource like any other and as such directly linked to a business model (Moilanen et al., 2019). Resources can be sold and purchased, and the key element is that resources are identifiable and available (Moilanen et al., 2019). API is doing exactly that, enabling easily identifiable resources, and making them available for the service-dominant-logic based business. Based on this overview of resources, it is clear to see that APIs can serve multitude of value creation methods and serve as resources for very different operations. For example, opening access to physical equipment and their operation to another service is a great example present in the case company as well. Also, for example legal and financial information can be opened to give an overview into them to serve better cooperation and co- creation between customers, partners, and the API producer. API owner decides and

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controls which resources are opened through the APIs (Moilanen et al., 2019). This links to earlier introduced concept of digital platforms and platform owner (Van Alstyne et al., 2017). A platform owner is very often utilizing APIs to make the decision about the resources to be shared and therefore it is through APIs that they define the rules and restrictions of their platform ecosystem.

Some of these resources can be exposed as boundary resources. What is meant by boundary resource is a resource enabling linkage of different bodies in a software ecosystem (Dal et al., 2014; O’Reilly, 2007). Software ecosystems can be described as markets, where end-users and third-party developers exist in two sides of the market (Dal et al., 2014). In such an ecosystem, a large number of end-users attract more third- party developers and at the same time a large number of applications created by third parties attract more end-users (Dal et al., 2014; O’Reilly, 2007). This is called cross-side network effect and is one form of the network effect described earlier (Dal et al., 2014, Parker et al., 2016). The applications developed by the third-party developers utilise and are at the same constrained by boundary resources exposed by the ecosystem. This means that the parties exposing critical boundary resources to enable application creation can control and influence what happens in the ecosystem while at the same time taking advantage of the third-party development and applications’ value creation process (Dal et al., 2014, Parker et al., 2016). Earlier it was discussed how an overly open platform approach can cause value deterioration (Van Alstyne et al., 2017). Boundary resources can be used as a means to control the openness and therefore also act as a quality guard for the ecosystem. This aspect is again highlighting how crucial APIs are when defining the business operations and limits within a digital ecosystem.

With the introduction of platform economy and API ecosystem basics, it is important to note the differences between these two. While APIs can and should be considered as a crucial element in a platform business, API ecosystem can be a wider concept. In platform economy the resources are not necessarily owned by the platform owner, but the platform is providing the marketplace where others are able to bring and interface

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their own resources. From API ecosystem point of view, the crucial difference is that the API owner is controlling the resources that are exposed via their APIs (Moilanen et al., 2019). The difference may seem subtle, but it has a fundamental impact on what kind of business is enabled in the ecosystem and who can partake in it. A transaction-platform would not need to restrict what kind of resources are used and sold on the platform, while an API ecosystem can define very clearly which resources are part of that ecosystem and only those can be utilized for business.

3.4 Monetizing Value in API Ecosystem

When customer value is understood, monetization model can be defined to reflect the value creation process and the capturing of that value. Monetization is a term that can be used to describe the value capture part of a business model (Osterwalder et al., 2014).

It is the process with which the customer perceived value is turned into transaction where money exchanges ownership. Monetization of digital services, platform and API ecosystem is a complex topic. The choice of a monetization model is usually between free, paid or indirect model (Heshmatisafa & Seppänen, 2020). While not all ecosystems aim for revenue, like the earlier introduced innovation or knowledge ecosystems (Valkokari, 2015), in this case the focus of business ecosystems is usually aiming for monetization. Companies want and need to be profitable. At the same time any charging of users can decrease the users in a platform and therefore damage the network effect and decrease the overall value of the platform (Parker et al., 2016; Van Alstyne et al., 2017). Companies need to find a balance between monetization, innovation and network effect on their digital platform and ecosystems. Pricing and monetization logic should be considered deciding factors in addition to boundary resources when it comes to decision on the different users within a digital ecosystem and their role in the business model. Wrong monetization model could become a hindrance to the growth of the ecosystem.

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The basic choice how to price a service is to choose between one-time payment and a subscription model (Fruchter & Sigue, 2013). One-time payment is very simple, easy to describe, calculate and communicate. One-time payment can include a perpetual license to a software service, or it can also include a fixed term with certain end date (Fruchter

& Sigue, 2013). In a subscription model, the customer pays a recurring fee for the service, until they choose to terminate the contract according to set terms. It is a balance between the cost of acquiring new customers for new one-time payments and the cost of customer relationship handling in a recurring service fee case.

Revenera (2020) conducted a survey into monetization models in software and IoT (internet of things) industry between April and June 2020. The survey was taken by 250 respondents in the industry and reveals interesting trends in monetization. The survey showed that 81% of software suppliers are using subscription models, and 37% using it as their dominant model. In the future, 53% of companies in the survey expect subscriptions models growing, compared to 48% who expect to see growth in usage- based models. Usage-based models are seen as a trend for the future, but at the same only 15% of the Revenera (2020) survey respondents were extensively using them today.

Based on a study conducted by Heshmatisafa & Seppänen (2020), most companies do not even clearly determine a revenue model for their APIs. This clearly shows how new the topic of API economy and API monetization still is for most companies. When there is a monetization model used for APIs, the most common approach is a combination of free and premium, meaning paid, tiers (Heshmatisafa & Seppänen, 2020).

Based on the previous discussion of APIs as both enablers and limit definers in an ecosystem (Moilanen et al., 2019) and the impact price can have on growth of an ecosystem (Van Alstyne et al., 2017) the topic of pricing is seen as a critical choice for the business model as a whole. The role of APIs has been discussed in an innovation ecosystem, as part of transaction platforms and also as individual value-creating elements (Parker et al., 2016; RedHat, 2020; Van Alstyne et al., 2018). It has also been discussed how pricing can decrease the growth of an ecosystem by keeping away

Value creation through API ecosystem : Case KONE